TORONTO (Reuters) - Toronto’s main stock index rose more than 1 percent on Friday, climbing back above the 14,000 mark in a broad rally led by the mining-heavy materials sector.
The rally followed four straight losing sessions on the TSX as investors worried about what impact the unrest in Libya and the Middle East in general might have on the global recovery as oil prices rose.
“The action earlier this week in the markets may now be perceived as an overreaction, so investors are now jumping in with both feet,” said Elvis Picardo, an analyst and strategist at Global Securities in Vancouver.
Commodity stocks, which took a drubbing when the market was sliding, made strong gains. First Quantum Minerals rose 3.1 percent to C$116.40, while Silver Wheaton gained 4.89 percent to C$39.86 and Teck Resources was up 3.14 percent at C$54.23.
The Middle East turmoil helped keep gold prices above $1,400 an ounce, but the rise in gold producers was also helped by improving market sentiment, said Barry Schwartz, vice president and portfolio manager at Baskin Financial Services.
“We’re seeing lots of dividend increases, lots of confidence, a lot of upbeat conference calls from Canadian CEOs, so that’s what the market is focused more on,” he said.
Shares of Goldcorp rose 3.49 percent to C$46.00 after the world’s second-largest gold miner by market capitalization reported better than expected earnings after market close on Thursday and raised its dividend.
The Toronto Stock Exchange’s S&P/TSX composite index closed up 184.82 points, or 1.33 percent, at 14,052.13. Eight of the index’s 10 main groups were higher, with the materials sector up 2.5 percent and the energy group up 1.55 percent.
The TSX was down 0.5 percent for the week, which was shortened by a provincial holiday on Monday.
Energy stocks made gains as the price of oil, the most sensitive commodity to the Middle East unrest, edged higher, erasing losses from earlier in the day when Saudi Arabia said it would increase output to make up for Libyan supply disruptions.
Suncor gained 2.05 percent to C$44.90, while Canadian Natural Resources rose 2.74 percent to 48.35.
Financials rose 0.77 percent, helped by a strong start to bank earnings season.
National Bank closed at an all-time high, up 1.86 percent at C$74.97, while Toronto-Dominion Bank ended the session up 2.03 percent at 80.96 and Bank of Nova Scotia finished 1.1 percent higher at C$60.00.
Fertilizer producers got a lift from a ratings hike from Royal Bank of Canada and steady corn prices. Potash Corp climbed 3.17 percent to C$58.87, while Agrium Inc gained 2.93 percent to C$92.69.
Encana Corp, Canada’s largest natural gas producer, agreed to a joint venture at its Jonah natural gas field in Wyoming, its partner, Northwest Natural Gas Co, said on Friday. Encana closed up 0.44 percent at 31.64.
Editing by Rob Wilson